Aid flows to the world's poorest countries must be increased by up to 20% to ensure they can afford to implement their own economic rescue packages, according to a high-powered UN commission.

After meeting in New York last week, the panel of heavyweight international economists, chaired by Nobel-prize-winning economist Joseph Stiglitz and convened by UN secretary-general Ban Ki-moon, issued a statement reminding governments not to forget the impact of the credit crunch on families and businesses in developing countries.

With the West spending billions of dollars rescuing bombed-out banks and supporting industry, the commission said: "It is imperative that developing countries be provided with funds to allow them to undertake comparable policies."

It called for the rich world not to cut back on aid spending, saying: "This is a time to expand it, probably by a magnitude of at least 20%, including for infrastructure projects addressing long-term development and environmental problems."

Stiglitz and his colleagues also warned that bailing out firms in rich countries could disadvantage their rivals in the emerging world. "Even the knowledge that there may be a rescue if things go badly gives firms in advanced industrial countries a distinct advantage: they can undertake risks that those in poorer countries cannot."

The UN, together with many NGOs, is concerned that discussions about economic reforms among the G20 - which includes developed countries and the most powerful emerging markets - will ignore more radical proposals for change.

British financier Avinash Persaud, who sits on the commission, told the Observer that any renewal of the world economic system in the wake of the credit crunch would have to tackle the dominance of the US. "We have a financial hegemon, and being a financial hegemon they have less constraint on their policies than others - and therefore there's a tendency for them to have policies that lead to crashes."

The Stiglitz commission's call to remember the developing world came as a team of experts from the International Monetary Fund arrived in Turkey to negotiate the terms of what is expected to be the largest bailout of an emerging economy since the downturn began.

Ankara was insisting as recently as November that it would not need aid from the IMF; but with the impact of tight credit markets being exacerbated by the downturn in global trade, it has been forced to open negotiations with the Washington-based lender. Analysts have suggested a loan could be worth up to $25bn, which would bring the total cost to the IMF since the crisis began close to $70bn.

Robert O'Daly, Turkey expert at the Economist Intelligence Unit, said the downward lurch in confidence around the world that followed the collapse of Lehman Brothers last September had left the economy at its most vulnerable since the lira crisis in 2001.